Crypto Companies Are Trying to Shed Their Wild West Image

0

Rufus Round, a former City investment manager, spent more than a year trying to convince the UK financial regulator to license his cryptocurrency business.

GlobalBlock, which allows customers to buy and sell Bitcoin and other digital assets, was among nearly 200 companies seeking to register with the Financial Conduct Authority (FCA) before the January deadline. last year.

The registration regime was put in place to bring cryptocurrencies, considered an online Wild West, into the financial fold, requiring money laundering and terrorist financing checks. But as of January last year, the watchdog had only licensed three companies, with a backlog stretching to dozens of companies.

More than a year later, GlobalBlock had had enough. Last month, it announced that it had established a European subsidiary in Lithuania, to run its business without interruption. The only difference is that a European regulator, and no longer a British one, now oversees the company.

GlobalBlock, founded in London in 2018, is not alone. British cryptocurrency exchange Blockchain.com, which also struggled to obtain a license, moved its operations to Germany and Ireland. Wirex, which offers a bitcoin debit card and has 250,000 UK customers, will now serve them from an entity in Croatia. Another, Celsius, said last year it was closing its UK business due to regulatory uncertainty.

Regulators around the world are trying to rein in cryptocurrencies like Bitcoin, both hailed as the future of money and criticized as a gift to criminals and scammers who could destabilize the financial system.

But space companies say Britain’s financial watchdog has been disproportionately obstructive and unhelpful.

A former cryptocurrency firm executive said, “Dealing with the FCA’s crypto asset licensing team has been disastrous,” saying the regulator was plagued by “constant staff changes, delays in reviewing bids and complicated by poor subject matter expertise”.

They added: “The net result of this hostile attitude is that the majority of innovators have moved their business to other jurisdictions.”

Peter Smith, the billionaire founder of Blockchain.com, told the Telegraph in February: “The UK has definitely fallen behind in the last two or three years. FCA lately has not been keen enough to foster innovation and work with industry.

The company also waited more than a year for a crypto asset registration before dropping off the list last week, after moving its services elsewhere.

Share.

Comments are closed.